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Case Study: Travelers Indemnity v. Dammann

Insurance Law360, Appellate Law360, and Product Liability Law360

March 2010
By: S. Vance Wittie

The Third Circuit Court of Appeals held that the economic loss rule precluded potential product liability claims against a seller of vanilla beans contaminated with mercury in Travelers Indemnity Co. v. Dammann, No. 09-1225, 2010 WL 395915. The buyer alleged that the tainted beans damaged “other property” -- in this case, other flavoring products -- with which the buyer mixed the beans. Travelers brought the litigation as a coverage declaratory judgment action against both the buyer and the seller.  Almost four years after the suit began, the buyer tried unsuccessfully to bring a cross-claim against the seller for breach of warranty and product liability. It turned out that the warranty claims were time-barred, and the economic loss rule prevented the product liability claim from being substantiated. The buyer appealed the economic loss ruling, but to no avail.

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Wittie, S. Vance

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Dallas

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